BEIJING, March 5, 2014 /PRNewswire/ -- China New Borun Corporation (NYSE: BORN; "Borun" or the "Company"), a leading producer and distributor of corn-based edible alcohol in China, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2013.

Mr. Jinmiao Wang, Chairman and Chief Executive Officer of Borun, commented on the results, "We completed a solid fourth quarter, with total revenues exceeding the high-end of guidance and profitability expanding to a 12-month high. We also successfully completed initial sales of our new chlorinated polyethylene ("CPE") and foam insulation products, marking a new milestone in our expanded business scope. Despite the challenging market environment over the past two years, we were able to earn positive net income in every single quarter, and as our momentum builds, we believe are well positioned to grow annual revenue, profitability and cash flow in 2014."

Fourth Quarter 2013Quick View

Total revenue increased 30.7% to RMB657.8 million ($107.9 million[1]) from RMB503.4 million in the fourth quarter of 2012.

Gross profit increased 44.3% to RMB78.6 million ($12.9 million) from RMB54.4 million in the fourth quarter of 2012.

Net income increased 41.1% to RMB30.5 million ($5.0 million) from RMB21.6 million in the fourth quarter of 2012.

Basic and diluted earnings per American Depositary Share ("ADS") were RMB1.18($0.19) for the quarter ended December 31, 2013. Each ADS represents one of the Company's ordinary shares.

[1]

This press release contains translations of certain Renminbi amounts into US dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to US dollars for the period ended December 31, 2013 were made at a rate of RMB6.0969 to USD1.00, the rate published by the People's Bank of China on December 31, 2013. China New Borun Corporation makes no representation that the Renminbi or US dollar amounts referred to in this press release could have been or could be converted into US dollars or Renminbi, at any particular rate or at all.

Mr. Wang continued, "Heading into 2014, we remain cautiously optimistic on our edible alcohol business, as the baijiu market further rationalizes supply and demand. We will continue to optimize our strong sourcing capability and strive to achieve greater operating leverage in our core business. At the same time, we are excited about ramping up sales and production of our newly-introduced CPE and foam insulation product lines. We're happy the construction of our new plants were completed on budget and practically without any glitches. We anticipate material contributions from the new business beginning in the second half of 2014."

FourthQuarter 2013 Financial Performance

For the fourth quarter of 2013, revenue increased by 30.7% year-over-year to RMB657.8 million ($107.9 million) from RMB503.4 million in the same period of 2012. The increase in revenue was mainly attributable to higher production volume and higher sales volumes for all of our products.

Revenue breakdown by product line is as follows:

Revenue from edible alcohol increased by 26.0% to RMB435.4 million ($71.4 million) in the fourth quarter of 2013, compared to RMB345.7 million in the fourth quarter of 2012. The sales volume of edible alcohol in the fourth quarter of 2013 increased by 29.6% year-over-year to 82,769 tons, primarily due to higher production volume as the market demand for edible alcohol temporarily recovered during this quarter. The production volume increased by 30.5% year-over-year to 81,810 tons in the fourth quarter of 2013. The average selling price decreased by 2.8% year-over-year to RMB5,260 per ton.

Revenue from DDGS feed increased by 44.0% to RMB152.1 million ($25.0 million) in the fourth quarter of 2013, compared to RMB105.7 million in the fourth quarter of 2012. The sales volume of DDGS feed in the fourth quarter of 2013 increased by 25.9% year-over-year to 67,905 tons, while the average selling price increased by 14.4% year-over-year to RMB2,240 per ton.

Revenue from liquid carbon dioxide increased by 9.0% to RMB11.9 million ($1.9 million) in the fourth quarter of 2013, compared to RMB10.9 million in the fourth quarter of 2012. The sales volume of liquid carbon dioxide in the fourth quarter of 2013 increased by 21.5% year-over-year to 28,486 tons, and the average selling price decreased by 10.3% year-over-year to RMB416 per ton.

Revenue from crude corn oil increased by 27.3% to RMB52.4 million ($8.6 million) in the fourth quarter of 2013, compared to RMB41.2 million in the fourth quarter of 2012. The sales volume of crude corn oil in the fourth quarter of 2013 increased by 29.8% year-over-year to 6,930 tons, and the average selling price decreased by 1.9% year-over-year to RMB7,563 per ton.

We began generating revenue from our newly-completed CPE and foam insulation plants during this quarter. Revenue from CPE was RMB5.0 million ($0.8 million) in the fourth quarter of 2013, and the sales volume was 553 tons at price per ton of RMB9,058. Revenue from foam insulation was RMB0.4 million ($0.1 million) in the fourth quarter of 2013, and the sales volume was 375 cubic meters at price per cubic meter of RMB1,101.

During the fourth quarter of 2013, gross profit increased by 44.3% to RMB78.6 million ($12.9 million) from RMB54.4 million in the same period of 2012. Gross margin for the fourth quarter of 2013 increased to 11.9%, from 10.8% in the same period of 2012, which was primarily attributable to the temporarily recovered market demand.

Income from operations increased by 52.8% to RMB65.6 million ($10.8 million) in the fourth quarter of 2013, from RMB42.9 million in the same period of 2012, primarily driven by higher gross profit earned.

Selling expenses slightly increased by RMB0.1 million, or 7.9% to RMB1.4 million ($0.2 million) in the fourth quarter of 2013, from RMB1.3 million in the same period of 2012.

General and administrative expenses increased by RMB1.4 million, or 13.5% to RMB11.6 million ($1.9 million) in the fourth quarter of 2013, from RMB10.2 million in the same period of 2012.

Interest expense increased by RMB10.9 million or 75.5% to RMB25.2 million ($4.1 million) in the fourth quarter of 2013, from RMB14.4 million in the same period of 2012, mainly due to the interest expense arisen from the Bond issued at the beginning of 2013.

Income tax expenses in the fourth quarter of 2013 were RMB10.2 million ($1.7 million), representing an effective tax rate of 25%.

Net income increased by 41.1% to RMB30.5 million ($5.0 million) in the fourth quarter of 2013, compared to RMB21.6 million in the same quarter of 2012. In the fourth quarter of 2013, basic and diluted earnings per ordinary share and per ADS were RMB1.18($0.19), and the Company had 25.7 million weighted average basic and diluted shares outstanding.

As of December 31, 2013, cash and bank deposits of RMB521.3 million ($85.5 million) decreased by RMB89.4 million, compared with RMB610.7 million as of December 31, 2012. Cash flows used in operating activities for the fourth quarter of 2013 were RMB21.0 million ($3.4 million), which was mainly due to that the Company pre-stored a part of corn during this quarter.

Full Year 2013 Financial Performance

For the year ended December 31, 2013, total revenue decreased 12.8% year-over-year to RMB2.3 billion ($369.9 million), from RMB2.6 billion for the year ended December 31, 2012. Gross profit decreased 29.1% year-over-year to RMB245.7 million ($40.3 million), from RMB346.8 million for the year ended December 31, 2012. Income from operations decreased 32.0% year-over-year to RMB198.9 million ($32.6 million), from RMB292.4 million for the year ended December 31, 2012. Net income decreased 57.7% year-over-year to RMB79.5 million ($13.0 million), from RMB188.2 million for the year ended December 31, 2012. Basic and diluted earnings per ordinary share and per ADS decreased to RMB3.09($0.51), from RMB7.31 in the prior year. Weighted average number of basic and diluted shares outstanding was approximately 25.7 million in 2013.

Financial Outlook

The Company estimates that its revenue for the first quarter of 2014 will be in the range of RMB500 million($82.0 million) to RMB530 million ($86.9 million), an increase of approximately 11% to 18% over the same quarter of 2013.

This guidance is based on the current market conditions and reflects the Company's current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change.

Conference Call

Borun's management will hold a corresponding earnings conference call and live webcast at 8:00 a.m. E.T. on Thursday, March 6, 2014 (9:00 p.m.Beijing time on Thursday, March 6, 2014) to discuss the results and highlights from the fourth quarter and full year of 2013 and answer questions from investors. A webcast of the call will be available at http://ir.chinanewborun.com. Listeners may access the call by dialing:

China New Borun Corporation (NYSE: BORN) is a leading producer and distributor of corn-based edible alcohol sold as an ingredient to producers of baijiu, a popular grain-based alcoholic beverage in China. The Company also produces DDGS Feed, liquid carbon dioxide and crude corn oil as by-products of edible alcohol production, and CPE and foam insulation that are widely used in chemical industries. China New Borun is based in Shouguang, Shandong Province. Additional information about the company can be found at http://www.chinanewborun.com and in documents filed with the U.S. Securities and Exchange Commission, which are available on the SEC's website at www.sec.gov.

Forward-looking Statements

All statements included in this press release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.